The demand curve for a monopolistically competitive firm is
A) elastic because the products produced are homogeneous.
B) inelastic because of barriers to entry.
C) inelastic because of the profit maximizing behavior of the firm.
D) elastic because of product differentiation.
Answer: D
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Define economics and describe its branches of study
What will be an ideal response?
In order to change the money supply, the Fed might use all of the following tools except:
A. discount window. B. reserve requirement. C. open market operations. D. deficit spending.
Federal tax policy:
A. treats employer health insurance premiums as taxable income. B. subsidizes health insurance and thereby increases the demand for health care. C. subsidizes health insurance and thereby decreases the demand for health care. D. corrects the overallocation of resources to the health care industry that would otherwise exist.
For the Coase theorem to apply, all of the following conditions must be satisfied except
A. Liability rules must be established and enforced. B. The basic rights of the individuals must be clearly understood. C. There must be no impediments to bargaining. D. Only a few people can be involved.